USDA climate bill analysis: ag gains

Agriculture Secretary Tom Vilsack says he understands the concerns some have expressed over a computer model that shows major losses of crop land to forestry as a result of the cap-and-trade legislation pending in Congress.

But Vilsack says he doesn’t believe the results from the afforestation forecast by the Forest and Agricultural Sector Optimization Model or FASOM developed by researchers at Texas A&M are “necessarily an accurate depiction of the impacts of climate legislation.”

Vilsack’s comments are interesting because of pronouncements by some prominent speakers about the potential impact of the climate change legislation that passed the House 219-212 last summer. Similar legislation will be carried over in the Senate to 2010.

Jim Wiesemeyer, vice president of Informa Economics, told participants in the USA Rice Outlook Conference that U.S. farmers could produce 22 percent less corn, 25 percent less soybeans and 25 percent less rice by 2050 under USDA’s analysis of the climate change legislation.

Those losses would occur if farmers switched the acres to trees to qualify for the $70 per ton carbon credits envisioned by the USDA analysis of the bills.

Wiesemeyer, a longtime observer of the Agriculture Department, Congress and other Washington institutions, said the legislation could lead to the U.S. livestock industry moving offshore because of the resulting jump in grain and oilseed prices.

In his presentation, Wiesemeyer said he was reading from USDA’s own analysis of the climate change legislation. That was before Vilsack’s statement on Dec. 18 that Joseph Glauber, USDA’s chief economist, had included discussions of the output of the FASOM model and USDA’s analysis in his appearances before Congress.

EPA has also used the FASOM model as part of its efforts to study the impacts of climate legislation, according to Vilsack’s statement.

So it’s difficult to know if the comments by various observers are based on the analysis by USDA, by the FASOM model or what. Farmers and others have had a wide range of such analyses to choose from.

While some organizations like the American Farm Bureau Federation have painted a dire picture of the legislative impact, saying it would reduce farm income by $5 billion per year by 2020, others like Iowa State’s Center for Agricultural and Rural Development have said the impact on farmers will likely be relatively small.

Frankly, one wonders why we would put much stock in forecasts going out to 2050 since we have real difficulty predicting what will happen next week, next month or next year. I doubt I will much care how many acres of corn we’re growing in 2020, let alone in 2050.

But, then, this is less about forecasts than about politics, isn’t it? Have a happy 2010.